What would an auditor likely do if they find a misstatement during an audit?

When an auditor identifies a misstatement during an audit, it is crucial to address it appropriately to maintain the integrity of the financial reporting process. Discussing the issue with the client allows the auditor to clarify the nature of the misstatement and explore potential adjustments to the financial statements. Engaging in this dialogue is part of the auditor's responsibility to ensure that the financial statements are free from material misstatement, whether due to fraud or error.

By addressing the misstatement with the client, the auditor can gather further information, assess the impact, and determine whether adjustments are necessary to correct the financial statements before issuing the final audit report. This collaborative approach helps uphold the quality and reliability of the financial reporting, ensuring that stakeholders can make informed decisions based on accurate information.

Addressing misstatements also aligns with the auditor's ethical responsibilities and professional standards, which emphasize due diligence and the application of professional skepticism throughout the audit process.